I recently sat down with Shinichiro Okuyama, executive officer at Aiful (one of Japan’s largest consumer finance companies), to talk about its new customer-centric approach to collection automation and how it supports the business.
Q: First, can you tell me about Aiful’s business in Japan?
Okuyama-san: We were founded in 1967 and are headquartered in Kyoto, Japan. The company has grown to become the third-largest consumer finance company in Japan. Today, the Aiful Corporation operates more than 800 branches and a network of subsidiaries that specialize in consumer credit, small business loans, venture capital, loan servicing and credit guarantees.
Q: Why did you decide to use FICO® Customer Communication Services?
Okuyama-san: We wanted to cut costs, enhance the customer experience, meet collection targets (called cure rates), and find a way to free call-center agents from low-level collections activity so they could make more valuable contributions to the organization.
We turned to FICO as part of our project to improve our collections and decided to take advantage of a solution called FICO Customer Communication Service (CCS).
The solution delivers an intelligent, scalable, two-way, automated voice, text, email and mobile app notifications, with a human touch. It allows us to contact our customers in a way that is effective and compliant with regulation. It is also cloud-based and pay-as-you-go, so that makes it appealing from a business standpoint.
Q: What sort of business problems were you trying to solve?
Okuyama-san: Most credit organizations in Japan rely primarily on letters and human phone calls to contact customers, combined with simple email or short message service (SMS). A few have tried first-generation automated voice blasts, but found those calls did not deliver a good customer experience or match the performance of human call centers.
Call centers have high numbers of staff and ongoing training costs. Collection agent error, such as excessive or noncompliant contact, also creates the risk of a poor customer experience. Peak-volume periods can be difficult to handle for centers with a fixed number of staff. And Japanese companies must operate within a strict legal framework that allows only three contact attempts per day.
So the vision was to avoid these problems, by bringing the best possible collections automation to Japan and tailoring it for the Japanese customer.
Q: How did collection automation solve these problems? What were some of the considerations in rolling out the solution in Japan?
Naturally, we were initially concerned whether this new communication approach would be accepted by consumers in Japan.
Aiful worked with FICO to tailor an automated collections solution to the Japanese market. FICO helped us to develop scripts that considered regional speech patterns and social sentiment, and included legal compliance and strong customer experience wording.
Together we then designed collections strategies that optimized a blend of automated voice with human agents to deliver the optimal cost-to-collect, cure rate, customer experience and legal compliance goals.
FICO then verified the performance of the CCS system with a champion/challenger test and used the results to further refine how the company was collecting overdue bills in the Japanese market.
I am pleased to say that just like in other countries, our customers have taken to automated communications for collections quickly. The advantages are numerous: the system contacts customers in a timely fashion; it delivers convenient payment options at the touch of a button; and customers rate the experience highly because it is a comfortable way of dealing with a credit issue. We think this is a great success.
Q: What sort of success have you achieved?
Okuyama-san: Through the efficiencies of automation, the new customer contact solution has allowed us to reduce the cost to collect and handle peak volumes without additional staff. We estimate we have been able to reduce the cost of collection by 20%.
We also know that customers prefer automation. Some 80% of our customers selected self-serve account options without asking to speak to an agent.
These are significant improvements to our key metrics around cost and customer satisfaction.
With regard to future developments, based on the success of FICO CCS at Aiful, we are looking to further expand its use to Aiful’s other business lines and group companies as our global solution and common platform.
Q: What sort of support have you received from FICO?
Okuyama-san: The FICO team was nimble and tenacious when it came to overcoming the technical difficulties involved in bringing a new technology to the unique market environment of Japan. The Aiful team was also passionate about bringing a new approach to our collections activity, so there was great teamwork from all involved in this project.
To learn more about how Aiful and FICO are improving customer communications in collections, watch this video interview with Shinichiro Okuyama: